Google’s news headlines have been dominated by a federal judge’s ruling on antitrust violations lately. But the tech giant has also made waves by announcing it no longer plans to deprecate third-party cookies in its Chrome web browser.
Third-Party Cookies & Privacy Concerns
Third-party cookies are among the most fundamental components for advertisers to track and isolate web users across the internet to serve more personalized ads based on individual behaviors or attributes. However, this level of user tracking has long raised privacy concerns from NGOs and governments alike on regional, national and global scales. Industry titans like Apple and Mozilla had more proactively implemented third-party cookie deprecation and options for users to opt out of this type of personal tracking and data sharing. In turn, this pushed companies like Google and Meta to respond in kind despite the awareness that it could diminish their annual ad-supported revenues.
Stakeholder Concerns Over Deprecating Third-Party Cookies
Google had publicly planned to deprecate third-party cookies since 2020. But significant pressures from stakeholders with conflicting opinions and interests led to multiple delays in Google’s timeline to implement the deprecation in full (most recently announcing a delay into 2025).
On one side, Google shareholders, advertisers and publishers working with Google had concerns about the detrimental impact these changes could have on annual revenues, leading Google to implement small-scale tests across portions of their Chrome users to better understand the impact on advertising. Co-participants in these tests like Criteo noted these tests pointed to a potential average revenue loss of 60% for publishers.
On another side, trade groups, regulators and Google competitors shared concerns about risks associated with third-party cookie tracking alternatives, like Google’s proposed Privacy Sandbox, and the potential for an unequal playing field. In place of third-party cookies tied to individuals, Google’s alternative plan has been to control access to their user-level data in what’s often described as a “walled garden.” Marketers would still gain access to Google targeting data allowing for personalized advertising, but only for cohorts or groups of people with similar attributes as opposed to individual users. This solution, however, has raised antitrust concerns as the deprecation of third-party cookies would have an outsized impact on smaller industry competitors who lack the advantages Google has within their massive walled gardens of user data. Essentially, Google would still benefit from their owned user data while deprecating or disabling the ability of their smaller cookie-reliant competitors to access the same type of information at an equally granular level. Additional risks revolve around the fact that Google would have significant control over how cohorts are defined and what attributes would be made available to other companies, undercutting the ability of small and large companies alike to develop their own audience definitions and cohorts.
What Retaining Third-Party Cookies Means for Marketers & Chrome Users
With so many competing perspectives on how Google should best navigate these changes, Google ultimately decided to end its plans for third-party cookie deprecation while still proceeding with its Privacy Sandbox solution. While this benefits publishers and advertisers within the Google ecosystem in the near term, many questions about how Google will proceed in the coming years are unanswered. Google has stated they will work to provide Chrome users greater control over which aspects of their data are shared and how they are tracked, and many analysts predict that could still seriously limit the prevalence of third-party cookies. Significant data loss would still occur if a significant amount of Chrome users elected to opt-out of this type of tracking and/or data sharing–if Apple’s iOS opt-in experience is at all similar to what Google may implement, it’s worth noting that only 24% of US iOS app users elected to opt-in to tracking in 2023.
While it’s likely Chrome users will soon gain more readily available controls over how they’re tracked and how their data is shared — as Google continues to build traction towards their Privacy Sandbox solutions — the only certain thing is the fact that any subsequent changes to Google’s publishing and advertising environments will continue to create seismic ripples in the digital media ecosystem for years to come, and Google decision to reverse the phase-out of 3rd party cookies in Chrome in no way alleviates the importance of advertisers and publishers alike to better prepare themselves for these implications.
Want to ask a question or learn more? Get in touch with us today.
